TokenInsightBitcoin "Third Halving" Mining Sector Research Report
The 3rd Bitcoin reward halving was completed on, may 12 this year. This article mainly analyzes the influence from the halving on miners' costs, Bitcoin computing strength and global mining.
(Supplementary knowledge: senior high school geography | China's university entrance evaluation simulation paper is surprised to see the "Sichuan Bitcoin Mine" discussing the migration of miners, seasonal electricity, and supply and requirement allocation) Summary of Key Points 1. Decline within the percentage of computing strength in Cina: Beginning with September 2019, the percentage of estimated strength in China has shown a gradual declining trend, and has now dropped from 75.63% to 65.08%; as the United States has started to exert initiatives from 4.06% rose to 7.24%, an increase of 78.33%; 2. US$0.035: Following the halving, if miners utilize the Antminer S17+, they need to control their electricity bill below US$0.08 (equivalent to RMB 0.56) or reduce operating costs to maintain profitability; if they use Antminer S9 for mining, they need to control the electricity bill To keep profitability below 0.035 USD (equivalent to about 0.25 yuan) or reduce costs 3. The surge in halving recognition: In accordance with Google Trends information, the current Bitcoin Halving research volume arrived at a peak of 100 within a week from the halving, and the research volume exceeded the previous peak (July 3-6, 2016, Prior to the second Bitcoin halving) a lot more than 9 times 4. The 16th largest: ON, MAY 20, the issue of Bitcoin mining had been adjusted for the very first time after halving. The difficulty of this realignment has lowered by 6%, which is the 16th largest realignment in Bitcoin background. 5. 20%: The average block generation time of the 1000 blocks prior to the halving (about one week) is 560 seconds, and the 1000 blocks after the halving will be 689 seconds, an increase around 20% year-on-year, indicating that there were about 20% during this time period. % Of system computing power is gradually disappearing 6. 18%: Prior to the halving, the percentage of handling charges basically continued to be below 6%; after the halving, with the halving of benefits and the increase in transaction volume, the dealing with charges of miners fluctuated within the number of 18%-24% 7. Obstacles and long roads: Following the halving, the full total transaction charges of Bitcoin have risen in a volatile way as TokenInsight experienced previously expected. Nevertheless, if we hope that Bitcoin will develop healthily relative to Satoshi Nakamoto's eyesight, that is, the primary income of miners will change from block benefits to transaction fees. There is still quite a distance to go. 8. North America: Overall, the UNITED STATES region has progressively begun to support digital asset mining and information the entry of money and establishments with professional operations and risk handle capabilities 9. Iteration: TokenInsight believes that 2020 is a vital year for the iterative transformation from the mining industry, and the early wild operation strategies will be changed by efficient, professional and refined business strategies 10. Reshuffle: Within the medium and longterm, the opportunities for the development of electronic asset mining outweigh the challenges, and the release of market pushes will boost mining development. Nevertheless, in the next one or two years after the halving, both upstream and downstream mining companies will encounter a reshuffle. 1. Summary of Bitcoin Halving 1.1 Bitcoin's annual supply growth rate after the third Bitcoin halving halving is about 1.7%; the blockchain mining ecology will be more severely affected by it At 3:23 am on, may 12th, Bitcoin officially finished the block reward halving in a block elevation of 630,000. The first halved block had been broadcast by AntPool. The block reward had been 6.25 BTC, and the transaction fee was about 0.91. BTC. In view from the soaring market of Bitcoin in the previous two halving cycles, the marketplace is more optimistic concerning the market attitude of the 3rd halving. Nevertheless, judging from the current halving data, the price tag on Bitcoin hasn't shown the expected sharp rise. Extended reading: [Our topic] Brief summary from the development of mining and mining machine Extended reading: the fattest fingers! Someone moved "$133" but compensated a "$2.65 million" fee. The lucky miner will be Spark Mine 1.1.1 Overview of Bitcoin halving cycle (as of May 18) Source: TokenInsight is really a type of asset allocation. Following the third halving, the yearly growth rate of Bitcoin supply is about 1.7%, which is less than gold's 4.8% in 20191 and the U.S. narrow money (M1) development rate of 4.44 in 2019 %2. For the 3rd Bitcoin halving cycle, the overall game of stock funds on the market is fierce, and Bitcoin price support requires the participation of subsequent new investors. The impact from the halving for the blockchain mining ecology far exceeds that of other industrial chains on the market: mining costs have risen sharply; miners' charge income has accelerated; some inefficient mining machines have been removed in batches; upstream and downstream mining such as for example mines and private pools , Mining machine producers will accelerate the reshuffle, and 2020 is a important year for the iterative transformation from the mining industry. *Note:
* 2019 precious metal supply * Extended reading of the annual modifications in the US M1: Nothing happened within the halving? Insiders: Nothing happened, it is "the best thing about Bitcoin"! 2. Summary of Blockchain Mining Growth 2.1 The average monthly computing strength from the Bitcoin mining marketplace in Cina may decline, as the United States seizes marketplace share In accordance with data linked to the Bitcoin Power Consumption Index (CBECI) released from the Cambridge Centre for Alternative Finance (CCAF), as of Might 7, 2020, the world's annual electricity consumption will be 20,863 trillion watts each hour (TWh ), the annual electricity consumption of Bitcoin mining will be estimated to become 69.03TWh, data processing for 0.33%. 2.1.1 Bitcoin Mining Power Consumption Index Source: Cambridge Centre for Alternative Finance, TokenInsightCCAF pointed out that although CBECI is a lot more accurate than most system data, its accuracy is still limited. Since it will be impossible to determine the accurate energy consumption of the Bitcoin system, CBECI supplies a range of opportunities, including the least annual power intake and the estimated annual power intake. The least annual power consumption assumes that miners utilize the most effective mining machines for mining. The estimated annual power intake assumes that miners use both new and old mining machines, rather than single certain type of mining machine. TokenInsight discovered that after the marketplace crash in March 12, 2020, the cheapest annual strength consumption catalog of Bitcoin mining declined, and the estimated annual strength consumption was a lot more pronounced. At the same time, after the halving, the estimated annual strength consumption in addition has shown a downward pattern. We believe that the estimated strength consumption of Bitcoin may reflect the disposition from the miners to a certain degree. The main reasons influencing bitcoin mining are bitcoin costs and mining benefits. When the marketplace is not optimistic, the attitude of miners will be negative. In addition, because of the impact from the halving, miners are expected to decline on the market outlook. Because of this, miners will progressively choose to shut down, leading to a slow drop in the energy consumption of Bitcoin mining. Judging from the average monthly computing power of varied countries estimated by CCAF, China's Bitcoin processing power is constantly on the occupy a higher proportion, and the overall rate remains over 65%. As of Apr 2020, the United States currently has the minute highest percent of computing strength, data processing for 7.24%; Russia rated third with 6.9%; Kazakhstan, Malaysia and Iran accounted for 6.17%, 4.33% and 3.82 respectively % From the global market. More reading: Data for the stringOverview of the problem after the Bitcoin halving: Data shows that Chinese language miners will face massive challenges Extended reading: BitmainSave the marketplace share! Urgently drive the S19 low-profile edition of "T19 Mining Machine"; the inner battle is constantly on the burn, and the state statement that Zhan Ke Tuan has lost momentum 2.1.2 Typical monthly hash rate (computing power) of each country Source: Cambridge Centre for Alternative Finance, TokenInsight On the other hand, starting from September 2019, the percentage of computing strength in China has shown a slow declining pattern, and it has dropped from 75.63% to 65.08%; as the United States has started to exert initiatives from 4.06% rose to 7.24%, an increase of 78.33%. Unexpectedly, Kazakhstan's present computing power ratio is 6.17%, which is an increase of 334.51% from 1.42% in September 2019. 2.2 Following the miner's marginal income (%) is halved, the previous era of mining machines has basically reached the shutdown price, and the next era of mining machines will be the mainstay in the future TokenInsight analyzes the income of miners by introducing two indicators, namely Miner's PROFIT PERCENTAGE and Marginal Cost of Creation. The calculation formula for the marginal production price of miners is really as follows:
Among them, Block Reward means the daily obstruct reward generated from the Bitcoin network (expressed in the amount of Bitcoins, this value is 1800 prior to the halving, and 900 after the halving, nonetheless it varies based on the situation); Deal Fees is the daily bit Gold coin network transaction charge; Hashrate will be hash power; Power Efficiency is strength consumption; Electricity is electricity price; Procedure Costs is operating cost. This formula displays the production cost of mining 1 Bitcoin mining machines. The marginal income of miners is the ratio of production costs to the price tag on bitcoin after deducting creation costs. Taking a new generation of mining machines such as for example Antminer S17+ for example, when the electricity charge is US$0.08 (equivalent to RMB 0.56), the marginal creation cost (operating price ratio 15%) prior to the halving is People$5,300, and after the halving it increases to People$9,300 about. The marginal revenue of miners (operating cost ratio 15%) continued to be at around 40% prior to the halving. Following the halving, the marginal income of miners fell to around 3%, generally unprofitable. 2.2.1 The Marginal Manufacturing Cost and Marginal Revenue of Bitcoin (Ant S17+; Electricity Charge: US$0.08) Source: The previous era of TokenInsight mining device uses the Ant S9 collection mining machine for example. Its marginal income and marginal creation cost are shown in the physique below. If the electricity charge is US$0.035 (equivalent to about 0.25 RMB), the marginal revenue of miners (operating cost ratio is 15%), the marginal revenue of Antminer S9 collection miners will remain at about 45% prior to the halving, but will fall below 0 after the halving. Following the marketplace stabilized, it continued to be at about 4%. The marginal production cost of miners was US$5,300 prior to the halving and rose to around US$9,300 after the halving. Further reading: Falling global oil prices allows "United states miners" to surpass China to grasp the "power competing advantage", especially from Texas-author who is proficient in Bitcoin Extended reading: Zero-sum game | China's "southwestern wet season" is coming again! Sichuan miners develop sideline to market cherries 2.2.2 Bitcoin's marginal creation price and marginal income (Ant S9; electricity price $0.035) Source: TokenInsight. In other words, if miners use Antminer S17+, they need to control electricity charges below US$0.08 or reduce operating costs to maintain profitability; if using Antminer S9 for mining, they need to control electricity charges below US$0.035 or reduce costs to maintain profitability . TokenInsight believes that Bitcoin's marginal come back below 0 will not mean that miners will lose money. Different miners have different mining device purchase prices, electricity fees, and procedure and maintenance costs. The greater significance for miners would be to consider the present blockchain mining. Signals from the mining market. For miners, regular switching opportunities will bring greater pressure on the mining device and power system, increase the harm rate, and affect income. On the other hand, it will cause greater loss in extreme marketplaces. When the marginal income falls beneath 0, miners and related industries have to estimate the marketplace outlook and adjust the production status appropriately, adopt measures such as for example water cooling technology, frequency reduced amount of the initial mining machine, and reduced amount of operation and maintenance costs to reduce production costs. It is not ruled out that there surely is a setting of adjusting the status from the mining device regularly, choosing to shut down or keeping mining at a loss but using financial methods to hedge, and stabilize the income. More reading: F2Pool executives' opinion of huge mining pool: Bitcoin miners will quickly enter the derivatives market 3. The impact from the halving for the blockchain mining 3.1 The halving heat Google Trends shows that the halving heat has skyrocketed, and Africa and European countries are the most enthusiastic According to Google Trends data, the current Bitcoin Halving search volume arrived at a peak of 100 within one week from the halving, and the search volume exceeded the previous peak (July 3-6, 2016, Bitcoin's initial Before the second halving) a lot more than 9 times. Source: Google Trends On the other hand, as of Might 30, nearly thirty days of Google Trends present that Africa and European countries are the most enthusiastic areas for Bitcoin halving this time around. Among the best 5 areas in search of interest in the past thirty days, Nigeria has the highest research interest, followed by Switzerland and Slovenia. 3.1.2 Bitcoin halving nation/region research interest Source: Google TrendsTokenInsight believes that European countries is definitely more open to digital resources. Because the largest economy in Africa, Nigeria has severe currency inflation, loose legislation and sufficient youthful audiences, driving the development of digital resources in Africa. More reading: Google search"Bitcoin halving" keyword search volume has reached its peak in 11 years! 3.2 Bitcoin price rebounded and marketplace sentiment was relatively optimistic after the halving As is seen through the physique below, within 2000 blocks before and after the conclusion of Bitcoin's halving, its price fluctuated sharply, getting a peak near the block elevation of 629,950, but then there was a sharp drop. Following the formal halving, the price tag on Bitcoin rose slowly, completely regained the previous decline, and attempted going to the $10,000 mark again. 3.2.1 Bitcoin price Source: Byte Tree, TokenInsight TokenInsight believes the fact that nearer to the halving instant, the greater unstable trader sentiment and the a lot more intense price fluctuations. Investors have got higher expectations for the halving, and after the marketplace has recovered and stabilized, trader confidence has strengthened again, which includes further promoted the marketplace. 3.2.2 Bitcoin Perpetual Funding Rate Source: Byte Tree, TokenInsight's perpetual funding rate can also present the positive attitude of the marketplace. Prior to the Bitcoin halving, the perpetual funding rate finished its two-month adverse condition and rose to a confident value. Although there will be slight changes due to price fluctuations, the current rate is still around 0.01%. 3.3 Following the difficulty of Bitcoin's entire system was halved, the issue of mining dropped by 6%, the 16th largest drop in history ON, MAY 20th, the issue of Bitcoin mining was adjusted for the very first time after the halving. The difficulty of this realignment has lowered by 6%, which is the 16th largest realignment in the annals of Bitcoin mining. 3.3.1 The Top 20 Decrease in Difficulty of the Whole Network Source: BTC.com, before and after TokenInsight's halving, the whole network's computing strength fluctuated around 100EH/s, and after the halving, the cheapest reached 81.65EH/s. By 10:00 on, may 21st, Bitcoin's entire network computing strength is about 94.37 EH/s, and the mining difficulty is 15.14T. You may still find 15 days and 3 hrs before the realignment, and the next mining difficulty will continue to decrease by 7.51% to 14.00T. 3.3.2 Bitcoin price and the pattern of whole system computing power Source: TokenInsight Extended Reading through: Hash strength dropped by 41% after halving! FTX launched "Bitcoin Hash Power Futures" based on the average difficulty of mining 3.4 Following the average block generation time is halved, the average block generation time will stop by about 20%, and the entire network's computing strength may continue to decline With regards to time, the average block time of Bitcoin in 2020 fluctuated up and down 600 secs before March; after getting into March, the average block time demonstrated a large raise, reaching 800 secs after the sharp drop in March; Because the price of Bitcoin elevated, the block era time came back to the number around 500 secs, and after the halving, it lowered again to near 800 secs. 3.4.1 Typical block time Source: Glassnode. Although the price of TokenInsight is basically the same as in March, under the halving marketplace, the time of Bitcoin block production is actually affected. At the same time, it also confirmed the shift of the whole network's computing strength after the halving. TokenInsight believes that at present, it is not probable to directly observe the processing power of the entire network, nonetheless it can be calculated from the average block generation time and difficulty. According to the analysis of average block time, Bitcoin's entire network has experienced a significant drop after halving. The average obstruct time for the 1000 blocks prior to the halving (about one week) was 560 seconds, and the 1000 blocks after the halving was 689 seconds, a year-on-year increase around 20%, indicating that about 20% from the network calculations have already been completed during this time period. The force progressively disappeared. And when you fall into the embarrassing circumstance that the price tag on Bitcoin remains unchanged and the rainy period hasn't arrived, the processing power of the entire network will continue to decline. 3.5 The amount of transactions for the chain of miners' income rose steadily, and investor sentiment was more optimistic From your perspective of the amount of transactions for the chain, the amount of transactions for the Bitcoin chain before and after the halving, although fluctuating greatly, showed a slow increase overall. Since Bitcoin didn't present an expected drop after the halving, after digesting the halving information, investors who have been within the wait-and-see condition on the market are gradually getting into the marketplace, and the overall trading sentiment is optimistic. 3.5.1 Amount of transactions for the Bitcoin chain Source: Byte Tree, the average number of transactions per 50 blocks for the TokenInsight Bitcoin chain Following the halving, transaction charges have risen needlessly to say, but miners utilize the charges as a livelihood. The income of miners continues to be mainly determined by block rewards instead of transaction fees. Because the processing strength of Bitcoin's entire network continues to rise, mining rewards are getting less and much less, so transaction charges are getting higher and higher, to be able to compensate for the income loss caused by the halving to a certain degree. The next figure shows the trend of transaction fees, the average cost of each transaction and the percentage of transaction fees before and after the Bitcoin network halving. It can be seen through the physique that before and after the halving, the block height is at 50 blocks before and after the halving, and the transaction charge of Bitcoin has more than doubled. Near the block elevation of 630,050, the full total transaction fee lowered to a minimal point, but then it continued to improve. When the block height reaches the number of 631,000, the transaction fee from the Bitcoin network includes a small peak, and the cost of a single block in the number exceeds the maximum of 1 1.8BTC. 3.5.2 Bitcoin overall transaction fees Source: Byte Tree, TokenInsight Bitcoin common total transaction charge per 50 blocks In general, after the halving, the full total transaction charges of Bitcoin have increased in a volatile manner as TokenInsight had previously expected. The increase in dealing with charges indicates that traders are prepared to pay a premium for transactions that need to be prepared first, and alternatively, it also demonstrates that the current market activity is increasing. 3.5.3 Typical handling charge per 50 transactions Source: Byte Tree, TokenInsight, judging from the average transaction charge per 50 transactions, within the 2000 blocks before and after the halving, the Bitcoin transaction charge rose from typically 0.00025BTC to 0.00046BTC, an increase of 84% year-on-year. In accordance with TokeInsight data, in the initial quarter of the year, the commission rate of miners' income (block prize + transaction charge) was maintained at 1.5%, however in March the speed rose sharply to 5.5%, and fell to a minimal degree in April. . The figure below is seen through the proportion from the fees for the 2000 blocks before and after the halving: Following the halving, the mining income of miners decreased, but the transaction fee income increased by 200% at the moment from the halving. Using the steady operation from the Bitcoin system after the halving, the average transaction fee percent of miners has elevated from 4% prior to the halving to about 15%. 3.5.4 Percentage of transaction charges in the full total income of miners Source: Byte Tree, TokenInsight Over time, transactions for the Bitcoin string have got gradually adjusted to some balanced state, nonetheless it has now oscillated within the number of 18%-24%. In general, after the halving, the full total transaction charges of Bitcoin have increased in a volatile manner as TokenInsight had previously expected. However, if we hope that Bitcoin will develop relative to Satoshi Nakamoto's eyesight, that is, the primary income of miners will change from block benefits to transaction charges. There is still quite a distance to go. Extended reading: the fattest fingers! Someone moved "$133" but compensated a "$2.65 million" fee. The lucky miner will be Spark Mine 4. Global mining policy changes and styles North America progressively supports digital asset mining, and abroad mines are expected to explode at a faster rate Judging through the regulatory policies updated by governments of varied countries from 2019 to 2020, government-level help has begun to appear, and the policies are biased towards helping the healthy development of the industry, like the issuance of licenses and size supervision. Political stability, reduced electricity tariffs, a well-structured legal framework, relatively older economic markets, and climatic conditions are the major factors for the development of blockchain mining. Cina: On November 6, 2019, virtual currency mining was removed by the National Growth and Reform Fee. On Apr 21, 2020, Sichuan introduced the initial batch of "Hydropower Consumption Demonstration Enterprises". On the list of 99 companies that entered, several mines were listed. United States: The Missoula State Commission in Montana has added green regulations for electronic asset miners. The rules require mines to become deployed just in light commercial and heavy commercial areas. After review and acceptance, the mining privileges can be expanded to Apr 2021 3rd. Canada: Continue to take measures to support the development of digital asset mining business in the country. Quebec Hydro agreed to reserve one-fifth from the electric power (about 300 megawatts) for miners. Georgia: Inside June 2019, the Abkhazian federal government within the autonomous Republic of Georgia relaxed the requirements for household digital asset mining activities and drafted a regulatory law that only requires mining licenses. Iran: Inside July 2019, the Central Standard bank of Iran recognized the digital asset mining industry and promised to carry out legal license processes. Belarus: Belarus programs to fully assistance the development of electronic assets and electronic economy. Chief executive Lukashenko said that it is proposed to create a large information center near the nearby nuclear power flower for the mining of electronic assets. Ukraine: The Ukrainian Ministry of Digital Transformation programs to legalize digital asset mining in the country within 2-3 years. The matching regulatory authorities also stated that mining will not need government guidance or treatment, and consensus rules are sufficient to regulate on-chain activities. Uzbekistan: On Jan 16, 2020, Uzbekistan announced the establishment of a "national mining swimming pool." Overall, the UNITED STATES region has gradually begun to support digital asset mining and information funds and institutions with professional operations and danger control capabilities to get into the market. At the same time, China's regulatory attitude towards blockchain mining is also changing, especially because of the advent of the wet period, Sichuan and other places have significantly more obvious assistance for blockchain mining. Nevertheless, because of the awareness of digital resources, you may still find uncertainties in upcoming policies. TokenInsight believes the fact that construction of abroad mines will explode in a quicker pace in the next two years. The main reasons are: 1. More stable guidance of digital resources; 2. A more organized legal and regulatory platform; 3. Traditional traders' The investment demand of resources is gradually raising; 4. Bitcoin mining is used to ease the requirement for electricity and solve the issue of weakening electricity prices during periods of weak electricity demand. 5. Overview and bet farewell to substantial operations, 2020 is a vital year for the iterative change of mining CoinShares published the "Bitcoin Mining System" statement and pointed out that Cina currently makes up about 65% from the world's mining size, and Sichuan alone makes up about 54% of the planet. The rest of the 35% are distributed in North America such as for example Washington, New York, United kingdom Columbia, Alberta, and Quebec, as well as in Europe such as for example Iceland and Norway. The TokenInsight Research team believes that although Cina comes with an absolute dominant position within the Bitcoin network, with the sound development of electronic asset mining and the support of related policies, there will be increasingly more large-scale traditional financial capital and secondary Marketplace financial providers enter the industry. 2020 is a critical yr for the accelerated reshuffle from the blockchain mining industry. The early substantial operation methods will be replaced by specialized, financial, and enhanced business strategies. The reshuffle from the upstream and downstream from the mining industry is accelerating, and the industry chain gives rise to more segments In the medium and longterm, the opportunities for the development of digital asset mining outweigh the challenges, and the release of marketplace forces will enhance mining development. Nevertheless, in the next one or two years after the halving, the upstream and downstream reshuffle from the mining industry will accelerate: The mine will continue to improve automation and refined management to improve overall professional operation capabilities. In case a relatively complete design and risk management aren't done prior to the halving, small-scale mining private pools will face a greater crisis, and the competition for top level mining private pools can be more intense. Mining device manufacturers will place a lot of energy into creation and study and development of 5nm and other technology products. Furthermore, affected by the effective IPO of Canaan Zhizhi in the United States, increasingly more mining device manufacturers will be listed in the future. Financialization is also a key part of the iteration from the mining industry. In the foreseeable future, processing power will be capitalized and financialized to lower the industry threshold. In the foreseeable future, the industrial chain devoted to digital asset mining gives increase to more subdivisions and additional broaden the scope of services.
